Unit economics and subscription businesses: the guide
Whether a business makes money on each order or customer: contribution per order, customer acquisition cost (CAC), lifetime value (LTV), churn, and cohorts.
Facts checked against sources onWhat strong candidates can do
- Build contribution per order from price to profit
- Calculate CAC, LTV, LTV/CAC, and CAC payback
- Read a cohort to find churn
- Find the levers that fix negative unit economics
Common questions
What does the Unit economics and subscription businesses guide cover?
Whether a business makes money on each order or customer: contribution per order, customer acquisition cost (CAC), lifetime value (LTV), churn, and cohorts.
How should you approach this type of case?
Build contribution per order from price to profit. Calculate CAC, LTV, LTV/CAC, and CAC payback. Read a cohort to find churn. Find the levers that fix negative unit economics.
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